Biden Budget Takes Aim at Crypto Wash Trading

Proposed changes on tax rules aroun cryptoasset wash trading could raise up to $24 billion, according to the Biden administration

article-image

Source: Shutterstock / lev radin, modified by Blockworks

share

President Joe Biden’s 2024 Fiscal Year budget will propose tax changes on cryptoasset transactions to eliminate wash trading.

As cryptoassets are not classified as securities, existing cryptocurrency traders are able to claim tax-deductible losses on failed cryptoasset losses and allow them to buy back into the same investments. 

Congress has previously considered changing the status of cryptoassets, but any bill is far from passage in the divided legislature.

This latest change in tax requirements for cryptocurrencies is expected to raise $24 billion for the Treasury, according to the Wall Street Journal.

In addition to applying the same rules to crypto traders as investors in the stock market — the Biden administration is also planning to increase tax rates for America’s wealthiest 0.01% to a minimum of 25%.

Individuals making more than $400,000 a year would see an increase in their taxes from 37% to 39.6% and corporations would see their taxes go up from 21% to 28%.

Currently, cryptocurrencies are considered a digital asset and according to the Internal Revenue Service (IRS) are taxable if they generate a gain or loss, including but not limited to:

  • Sales for fiat currency
  • Exchange for goods and services 
  • Airdrops 
  • Minting and staking activities

The budget is expected to be released today, but will need to be approved by the House of Representatives and the Senate before receiving final sign-off from the President.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Flashnote Template (41).png

Research

We believe that few tokens at the application layer are diverging more from fundamentals than ZORA. Its fully-diluted P/S sits at 90x, pricing significant growth despite a consistent decline in weekly revenues since late July. We foresee an 80% decrease in protocol net margins due to a recent update to the fee structure that reduces trading fees from 3% to 1%, while boosting creators’ portion of the fee split. ZORA’s supply overhang also represents a near-term headwind, with 45% of ZORA’s supply (4.5B tokens or $350M at current prices) earmarked for the team & investors beginning to unlock on October 23, 2025 (36-month linear vesting schedule).

article-image

Insiders have the best information — markets should be willing to pay for it

article-image

The CFTC-regulated exchange is opening doors to crypto builders and traders through grants, partnerships, and new deposit options

by Blockworks /
article-image

DFS tells banking organizations to integrate blockchain monitoring tools to curb money laundering and sanctions risks

by Blockworks /
article-image

New short and long-term priorities include L1 gas boosts, ZK-EVMs, privacy reads, and a lean, quantum-resistant Ethereum

by Blockworks /
article-image

The new stBTC token redistributes Bitcoin gas fees to users, creating liquid yield without inflation or lockups

by Blockworks /
article-image

The reserve will collect protocol revenues to back W token, alongside new yield and unlock schedule

by Blockworks /